IMPORTANT POINTS
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 did not overrule Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105 but said that Bharat Aluminium would be prospective meaning thereby that cases prior to Bharat Aluminium will be governed by Bhatia International.
Instant case being prior to Bharat Aluminium shall be governed by Bhatia International and looking to terms of the substantive arbitration clause, application of Arbitration and Conciliation Act, 1996 is excluded. Therefore courts in Indi will have no jurisdiction

Judgment

Dipak Misra, J.

The issue that has emanated for consideration in this appeal is whether in the obtaining factual matrix, especially regard being had to the nature of the arbitration clause, the High Court is justified in setting aside the order passed by the learned Additional District Judge, Ernakulam on 25.9.2014 in I.A. No. 4345 of 2014 in O.P. (ARB) No. 802/2014 directing the first respondent therein to furnish security for US$ 11,15,400 or its equivalent (approximate) Indian Rupees 6,60,00,000/-or to show cause on or before 01.10.2014, and as an interim measure conditionally attaching the cargo belonging to the first respondent herein, while dealing with an application moved under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, “the Act”), on the foundation that Section 9 of the Act is limited to the applications to arbitration that takes place in India and has no applicability to arbitration which takes place outside India in view of the pronouncement in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 inasmuch as clause 5 of the contract which is the arbitration clause clearly spells out that the contract is to be governed and construed according to English law and if the dispute of the claim does not exceed USD 50,000, the arbitration should be conducted in accordance with small claims procedure of the London Maritime Arbitration Association.

2. Regard being had to the lis in question, suffice it to state that an agreement was entered into between the parties on 20.10.2010 in respect of 24 voyages of coal shipment belonging to the appellant, the first respondent before the High Court, from Indonesia to India. The respondent no. 1 herein, Gupta Coal India Ltd., undertook only 15 voyages and that resulted in disputes which ultimately stood referred to arbitration. Be it noted, an addendum to contract was executed as regards the remaining voyages on 3.4.2013 when disputes arose in respect of the principal/main agreement. As the facts would undrape arbitration proceedings were initiated and eventually an award was passed.

3. After the award came into existence, the present appellant filed an application under Section 9 before the District Court, Ernakulam for its enforcement under Sections 9/47 and 49 of the Act. As the factual narration would further uncurtain in respect of the addendum to contract, when disputes arose relating to the same, arbitration proceedings were initiated and at that juncture, the appellant moved the learned 2nd Additional District Court, Ernakulam under Section 9 of the Act seeking attachment of the cargos as an interim relief and the learned Additional District Judge, as has been stated earlier, issued conditional order of attachment.

4. The order passed by the learned Additional District Judge, was assailed before the High Court in a Writ Petition, O.P.(C) No. 2612 of 2014 raising a singular contention that the impugned order therein was absolutely without jurisdiction and hence, unsustainable in law.

5. A counter affidavit was filed contending, inter alia, that the application before the learned Additional District Judge was maintainable inasmuch as the contract between the parties was entered into prior to the decision in Bharat Aluminium Co. (supra) and, therefore, the principle laid down in the said decision was not attracted to the facts of the case, and in fact, it was governed by the principles stated in Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105.

6. The High Court, after hearing the learned counsel for the parties, referred to main agreement, Exhibit P-1, the addendum, Exhibit P-2, and the arbitration clause in the main agreement and considered the decisions in Bhatia International (supra) and Venture Global Engg. v. Satyam Computer Services Ltd., (2008) 4 SCC 190 some decisions of the High Court, reproduced a passage from Russell on Arbitration and eventually came to hold as follows:

“The contention that since Ext